Creador invests in Vietnam’s Mobile World

Creador has completed its first investment in Vietnam, committing VND994 billion ($43.8 million) to Mobile World, the country’s leading mobile device and consumer electronics retailer.

The private equity firm bought shares on the public market, including a block sold by Mekong Capital. This represented a final exit for the Vietnam-focused GP, which had been an investor in Mobile World since 2007. Chris Freund, a partner at Mekong, said he would have happily remained invested in Mobile World if it wasn’t for fund life limitations.

Founded in 2004, the company has expanded rapidly over the past decade. From having just seven outlets in 2007, it moved to 209 in 2011, 564 in 2015 and now has around 1,070, with a market share of more than 40%.

Mobile World has also become Vietnam’s leading consumer electronics and household appliances retailer, with 657 larger-format stores, and it has a further 285 locations in Ho Chi Minh City as part of a nascent mini-supermarket concept. In addition, the company claims to be the number one online retailer, receiving more than one million daily visitors across its portfolio of websites.

“With a thriving young population and rising disposable income, we foresee a robust growth in Vietnam’s consumer sector. [Mobile World] stands out among its peers, not only because of its dominance in offline retailing, but also its market-leading position in online retailing with 16% market share currently,” Creador said in a note to investors.

Mobile World generated VND45.6 trillion in revenue for 2016, up from VND25.4 trillion the previous year, while net income increased from VND1.08 trillion to VND1.57 trillion. The company has seen compound annual growth in revenue and net income of 52.6% and 58.3%, respectively, since 2011.

Mekong committed $3.5 million for a 35% stake in 2007 and made a partial exit in 2013 when CDH Investments acquired a 19.88% interest for around $20 million. Most of the shares came from Mobile World’s founders. They took the company public in 2014 and have made multiple partial exits over the ensuing years. Mekong secured a 57x return on its position. As of late January, CDH still owned 0.40%

Creador is targeting $500 million for its fourth Southeast Asia and India-focused fund, which will launch in February. The private equity firm closed its previous vehicle at $415 million in late 2016. The core geographies are Malaysia, Indonesia, Singapore, and India, with deals in other markets considered on an opportunistic basis.

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